Sagility India bags Rs 945cr from anchor investors in pre-IPO frenzy

In a significant prelude to its initial public offering (IPO), Sagility India has successfully raised ₹945.4 crore from 52 anchor investors on November 4, 2024. This substantial capital infusion underscores robust investor confidence in the company’s strategic direction and market position.

Anchor investors infuse substantial capital

Sagility India allocated 31.51 crore equity shares to anchor investors at ₹30 per share, the upper limit of the IPO price band. Prominent global investors such as Nomura Funds Ireland, Government Pension Fund Global, Florida Retirement System, Amundi Funds New Silk Road, and Goldman Sachs (Singapore) Pte participated in this pre-IPO funding round. Domestic investors included ICICI Prudential Mutual Fund, HDFC Mutual Fund, Motilal Oswal Mutual Fund, Max Life Insurance Co Ltd, and ICICI Prudential Life Insurance Company.

IPO details and structure

The IPO is entirely an offer for sale (OFS) of 70.22 crore equity shares by the promoter, Sagility BV, aiming to raise ₹2,106.6 crore at the upper price band of ₹30 per share. The company will not receive any proceeds from this public issue; all funds will go to the selling shareholder.

Company overview

Sagility India specializes in providing technology-driven services to U.S.-based healthcare payers (health insurance companies) and providers (hospitals, physicians, and medical device companies). The company’s services include centralized claims administration, payment integrity, clinical management, and revenue cycle management. As of March 31, 2024, Sagility India employed 35,044 individuals, with women comprising 60.52% of the workforce.

Financial performance

In the fiscal year ending March 31, 2024, Sagility India’s revenue from operations increased by 12.7% to ₹4,753.56 crore, up from ₹4,218.41 crore in the previous year. The company’s profit after tax rose by 50% to ₹228.27 crore, compared to ₹143.57 crore in the preceding fiscal year. For the quarter ending June 30, 2024, the company reported revenue of ₹1,223.33 crore and a profit after tax of ₹22.29 crore.

Strategic acquisitions

In March 2024, Sagility India acquired BirchAI, a healthcare technology firm specializing in cloud-based generative AI technology. This acquisition is expected to enhance member and provider engagement and reduce clients’ operational costs through AI-powered customer support solutions.

Market position and future prospects

Sagility India’s focus on the U.S. healthcare market positions it well to capitalize on the growing demand for efficient healthcare services. The company’s comprehensive suite of technology-enabled services and long-term relationships with major U.S. healthcare payers and providers underscore its strong market position.

Expert opinion

Industry analysts view Sagility India’s successful anchor investment round as a positive indicator of investor confidence in the company’s business model and growth prospects. The strategic acquisition of BirchAI is also seen as a move to strengthen the company’s technological capabilities, potentially leading to enhanced service offerings and operational efficiencies.

Sagility India’s successful pre-IPO fundraising and strategic initiatives highlight its robust position in the healthcare services sector. As the company moves forward with its IPO, it aims to leverage its strong market presence and technological advancements to drive future growth.